Hotel Headlines – Week of January 27, 2013

February 2, 2013

Four-Year Boom Expected for the US Hotel Industry

At this year’s Americas Lodging Investment Summit, the world’s largest hotel investment conference optimism was high as the U.S. hotel industry continues to flourish. Many in the industry say they expect the good times to keep rolling for a few more years until supply catches up with demand.

98 percent of delegates at this year’s conference, including investors and hotel-service providers, said they expect positive revenue per available room growth in 2013

Mark Woodworth, president of hotel property-research firm PKF Hospitality believes this is the best time that we’ve seen in the industry, in terms of fundamentals being solid, going back to the mid-1970’s.

Key fundamentals, including demand growth, average daily rate growth, revenue growth and profit growth are several times their long-run averages, while new construction is “well below average.

STR releases updated 2013, 2014 forecasts

According to the most recent forecast from Smith Travel Research, the U.S. hotel industry expects to see performance increases during 2013 and 2014. Overall, in 2013 occupancy is expected to rise 0.8 percent to 61.9 percent, average daily rate is forecasted to increase 4.9 percent to $111.27 and revenue per available room is expected to grow 5.7 percent to $68.86.

The forecasted ADR would surpass the 2008 peak level ($107.41), and the projected RevPAR would surpass the 2007 peak level ($65.56).

Supply in 2013 is forecasted to rise 1.0 percent, and demand is projected to be up 1.8 percent.

The forecast for 2014 includes:

a 1.3-percent increase in occupancy to 62.7 percent;

a 4.6-percent rise in ADR to $116.43;

and a 6.0-percent growth in RevPAR to $72.97.

In 2014, supply (+1.5 percent) and demand (+2.8 percent) are both projected to increase.

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